TB871: What is a ‘strategy’?

Note: this is a post reflecting on one of the modules of my MSc in Systems Thinking in Practice. You can see all of the related posts in this category. 

---

Activity 1.9 involves watching the following video from David Kryscynski which I also found on YouTube.

I’ve pulled out the most relevant parts from the transcript below:

[T]he word strategy originally comes from the Greek word strategos, meaning the art of the general. In other words, the origin of strategy comes from the art of war and specifically the role of the general in a war.

[…]

A good strategy provides clear and concise answers to four key questions. First, where do we compete? In other words, what competitive arenas or markets will we be active in? We define markets as industries, product markets within those industries, and geographic markets.

Second, what unique value do we bring to win in those markets? In other words, why do our customers choose our products and services when they could have chosen the products and services of any competitor out there? Our unique value could be cost or differentiation, which includes image, customisation, styling, reliability, et cetera.

Third, what resources and capabilities do we utilise to deliver that value? Do we have exceptional human capital, superior technology, unrivalled network connections, or a unique reputation? Resources generally refer to the things we have in our toolbox.

These things can be tangible, such as a diamond mine or an oilfield, or they can be intangible, such as a reputation. Capabilities generally refer to the things that we can do or our ability to use the things in our toolbox.

Fourth, how do we sustain our ability to provide that unique value? Are there barriers to imitation? Are there factors that keep our competitors from being willing or able to replicate the value we create for our customers? This last question focuses on understanding what factors allow us to continue to win over time.

[…]

[I]n addition to clearly articulating why we win with customers, a really good strategy also provides a clear boundary line signalling what we do not do.

[…]

Henry Mintzberg, one of the most well-respected business strategists of our day, would want to emphasise the important differences between an intended strategy, an emergent strategy, and a realised strategy. He would want you to know that sometimes strategy is really more about what you actually do rather than what you intend to do. That is, your real strategy emerges as you do it, and may not line up with your plans.

Other strategists would not want me to leave out the importance of staging, or timing. You may have a great plan, but if you execute the plan with poor timing, it may fall flat. To be successful, you also need to have a well orchestrated set of time steps, in order to win in the marketplace.

The mention of Mintzberg takes us back to the previous activity about situation vs practitioner focus. Along with his colleagues, he classified strategies along these lines:

• Situation-focus: This approach evaluates how comprehensible and manageable or unpredictable and perplexing the external world is, emphasising the context of various situations.
• Practitioner-focus: This looks at the proposed internal processes, ranging from systematic, rational methods to more intuitive, natural approaches, with an emphasis on the perspectives and theories of the practitioners involved.

As the course materials point out, just as there are many approaches to systems thinking, so there are many schools of thought when it comes to coming up with strategies.

The authors of Strategy Safari: A Guided Tour Through The Wilds Of Strategic Management (Mintzberg et al., 1998) identify ten schools of making strategy.

The first five schools are prescriptive with a practitioner focus on the process of making strategy:

1. the design school, which sees making strategy as a process of attaining a fit between the internal capabilities and external possibilities of an organisation
2. the planning school, which extols the virtues of formal strategic planning involving analyses and checklists
3. the positioning school, which stresses the strategic need for positioning an organisation in the market and within its industry
4. the entrepreneurial school, which emphasises the central role played by the leader
5. the cognitive school, which looks inwards into the minds of strategists.

The last five schools are descriptive with a focus on the situation in which strategies emerge:

6. the learning school, which sees strategy as an emergent process – strategies emerge as people come to learn about a situation as well as their organisation’s capability of dealing with it
7. the power school, which views strategy emerging out of power games within the organisation and outside it
8. the cultural school, which views strategy formation as a process rooted in the social force of culture
9. the environmental school, which believes that a firm’s strategy depends on events in the wider environment in which the firm sits and the company’s reaction to them
10. the configuration school, which views strategy as a process of transforming the organisation – it describes the relative stability of strategy, interrupted by occasional and dramatic leaps to new ones.

(Adapted from Chakravarty, 2005)

The Open University (2020)

I have to admit, I’m not a huge fan of thinking about strategy as necessarily being about competition. Isn’t it just as likely to be about cooperation?

References

• The Open University (2020) ‘1.2.4 Situations, systems, and making strategy’, TB872 Block 1 Systems and Strategy [Online]. Available at https://learn2.open.ac.uk/mod/oucontent/view.php?id=2261477&section=3.4 (Accessed 10 May 2024).